Opporutnities for UK Buyers in Canada
The Canadian marketplace
The debt sale market in Canada is small (around $1.6-2.0bn sold in total 10 2006) but vibrant, with 50% growth reported in 2007 by buyers, and the Canadian banks gradually exploring the idea of debt sale. The major push to sell is of course coming from US buyers, but in my view there may be both a cultural divide and a privacy impediment. Canadians prize privacy very highly, whereas the US Patriot Act allows the US government access to any data which crosses into the US which could limit sales to US buyers.
Links with the UK could therefore be of great mutual benefit, as many players seem to agree that the development and the strong stance of the DBSG could be more relevant than the DBA, and we have no Patriot Act.
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Opportunities in Canada
Public Sector Debt
All around there are media reports about the mounting debt crisis, a crisis giving greater impetus still by talk of the credit crunch and impending doom on the High Street. The malaise is also hitting businesses hard, and making an already precarious position more difficult still.
The fact there is a crisis is not in doubt. Six months ago the CSA concluded a comprehensive survey of business activity, trends and data supplied by its 300 members to ascertain the size and volume of the collections market. The results were staggering. The amount of debt passed to debt collection agencies for recovery has more than trebled in the last six years to £21 billion. The number of cases has also risen; CSA members now handle more than 20 million cases, up from 17 million cases two years ago. Nearly one million (885,063) of those cases involved tracing, highlighting the increasing problem of ‘gone-aways’.
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Public Sector Debt
Education Sector
Student debt are two words that sit together as comfortably as ‘foregone’ and ‘conclusion’. But aside from the often hysterical coverage meted out on the subject, many credit managers within the tertiary education sector are well advanced in their dealings with the problem, and in working with external collections agencies to maximise the return of monies that would otherwise be lost in the system.
Debts incurred by students, or at least those that concern the universities or colleges to which they belong, tend to focus around two main areas: accommodation fees, and tuition fees. To these are then added what might be termed ‘sundry debts’, for example payment for field trips, library fines etc.
The potential for debt is considerable; even if only a small percentage of tuition fees, for example, is not recovered, it can amount to several millions of pounds ‘lost’ to that university.
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Education Sector
CSA Launches Debt Manifesto
The Credit Services Association (CSA) - the official body representing the UK debt collection industry - is launching a Manifesto calling for a radical review of legislation and regulation that concentrates too much on the rights of the consumer, and not enough on their duties to fulfil their financial obligations.
It is also challenging the government to tackle the issue of ‘information sharing’ - the biggest problem impacting the recovery of debt being the lack of rightful access to information about debtors who have wilfully absconded or disappeared so as to evade their debt obligations.
Specifically it believes there should be a legal requirement for individuals to register an address with their creditors, and inform creditors if they move. This would, practically overnight, protect the innocent from the incidences of ‘mistraces’ that have been allowed to overshadow the real issue of certain debtors committing deliberate fraud or evasion.
To download your copy of the Manifesto, click here.
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Manifesto
